Kolkata, February 17: The Kolkata zonal office of the Directorate of Enforcement (ED) filed a prosecution complaint against Krishna Damani on February 11, 2026, under the Prevention of Money Laundering Act (PMLA), 2002, before the Chief Judge of the City Sessions Court, Kolkata.
The special court issued a notice to the accused under Section 223(1) of the Indian National Security Code (BNSC) 2023. This case is linked to the misappropriation of funds from the South Point Education Society (SPES), initiated by an FIR registered by the Kolkata Police. The ED launched an investigation based on this, revealing extensive fund diversion.
The investigation revealed that trustee Krishna Damani gained complete control over the Board of Trustees, sidelining other members. After establishing dominance over governance, he misused his position to transfer substantial school funds to companies owned by himself and his family members.
Over ₹20 crore was diverted under the guise of manpower services and other expenditures. Payments were made through fake vouchers, fraudulent invoices, and fictitious employee records. This included salaries for staff who never existed, while payments were made to Damani’s personal employees from the society/school accounts.
According to the ED, Damani also misused school funds for elite club membership fees, personal expenses, and salaries during the lockdown period, even for services that were never rendered. The proceeds from these crimes were distributed among family members (wife, mother, daughters) and companies he controlled as inflated salaries, director fees, and commissions. This money was then layered through mutual funds and other investments, creating a money laundering scheme.
This case is part of an ongoing investigation that began in 2024 when the Kolkata Police arrested Damani in February 2024. The allegations involve misappropriation of over ₹30 crore, with funds transferred through companies linked to relatives, such as Global Staffing Services and Pastil Mercantile. The ED also conducted search operations in September 2024. Initially, Damani was placed in police custody but later received bail.
The ED’s investigation has uncovered serious misuse of charitable organization funds for personal gain. Further investigations are ongoing, with additional evidence being collected. The ED claims that more accused may emerge as the investigation progresses.
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